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Eurex Roadmap huge success all over Europehttps://www.eurexchange.com/exchange-de/ueber-uns/news/Eurex-Roadmap-huge-success-all-over-Europe-1550394
Frankfurt, London, Paris, Amsterdam, Zurich – these were the stops on the European leg of Eurex Roadmap 2019. More than 250 clients took the chance to learn the latest about new market models and improved products, solutions and system upgrades such as T7, C7, CCP, Prisma and EurexOTC Clear.
Every workshop closed with a presentation about the simplification of the Eurex segregation model initiative. The whole agenda gave everybody sufficient material for discussion and the reception following each workshop provided a perfect opportunity for the experts from Eurex Exchange and Eurex Clearing to give in-depth answers to any open questions.
We would like to thank all participants for their interest and participation.
The Eurex Roadmap 2019 will continue in Chicago in September.
You were not able to attend, or you would simply like to revisit the presentation?
Find the complete presentation here under Further information.Tue, 21 May 2019 11:00:00 GMT2019-05-21T11:00:00ZEurex: supporting Europehttps://www.eurexchange.com/exchange-de/ueber-uns/news/Eurex-supporting-Europe-1548354
Today, Eurex Exchange is the number one derivatives exchange in Europe, providing investors with access to the widest spectrum of equity index derivatives, primarily Europe-based derivatives. A wide range of trades is carried out from stocks to fixed income instruments issued in Germany, Italy, Spain and elsewhere.
Our futures and options on EUR-denominated government bonds and derivatives on the benchmark indexes DAX® and EURO STOXX 50® are among the most actively traded interest rate and equity index derivatives in the world.
Innovative and reliable technology provides access to products and services to more than 400 participants and approximately 7,500 dealers in 36 countries worldwide. Eurex offers a wide range of equity-based contracts on indexes, equities, ETFs, dividends and some of the world’s most liquid interest rate derivatives – all on a single trading platform.
Eurex Clearing is one of the leading central counterparties globally – assuring the safety and integrity of markets while providing innovation in risk management, clearing technology and client asset protection. We clear the broadest scope of products under a single framework in Europe – both listed products and OTC – and accept the world’s widest spectrum of eligible collateral.
With this offering, we support Europe’s capital markets. We enable investors from all around the world to invest in the European Union as we provide them with the hedging tools they need. Mon, 20 May 2019 08:00:00 GMT2019-05-20T08:00:00ZAdditional opportunities in new markets? Our ESG futures get CTFC approval.https://www.eurexchange.com/exchange-de/ueber-uns/news/Additional-opportunities-in-new-markets-Our-ESG-futures-get-CTFC-approval.-1547616
We asked Vassilis Vergotis, Head of Strategy and Product Design for Equity and Index at Eurex.
Vassilis, what exactly is a CTFC approval and what do we need it for?
For products that we offer in the U.S. for direct market access via our terminals, we need to engage CFTC, the U.S. regulator, and ask for the appropriate permissions. An approval is granted if the product that we intend to offer meets certain pre-defined criteria. Especially in the case of index futures what is of interest is the number of constituents, the relevant weightings, index concentration in the top constituents, etc. With these parameters the regulator is trying to ensure that the underlying index cannot be easily manipulated.
We work together with our colleagues from legal in the U.S. in every such effort that involves a regulatory approval of a product.
A regulatory permission opens the U.S. market – both buy side and sell side – to us, allowing our new ESG derivatives to be utilized from U.S.-based investors that apply ESG criteria to their portfolios.
You have just recently participated in a panel at FIA Boca. How strong was the interest in sustainable investing?
The panel we had at the FIA conference in Boca Raton was specifically discussing global trends in sustainable investing. Apart from other exchanges and market participants, the panel had one CFTC commissioner who openly asked the question to us and the audience about what the agency should do to help shape the industry and further facilitate any emerging or further developed trend in ESG investing. Both the panel and the audience were very interested to hear about the initiatives in Europe and the involvement of the European Commission in the space.
Is there also the trend to sustainable investments in the U.S.?
It seems like the topic of ESG investing is increasingly emerging in the U.S. with focus in some cases on areas that do not always apply in Europe like GMO and others.
As the discussion in the U.S. is gaining momentum, we will definitely keep an eye on any further developments.
Are there similar products in the U.S.?
Although U.S.-based MSCI is a major index provider in the ESG space, at the moment there are only ETFs as investment vehicles that go into the direction of sustainable investing. We are the first exchange to consider sustainability criteria for derivatives products.Fri, 17 May 2019 08:00:00 GMT2019-05-17T08:00:00ZEuro clearing in Frankfurt – an updatehttps://www.eurexchange.com/exchange-de/ueber-uns/news/Euro-clearing-in-Frankfurt-an-update-1547490
A lot has happened since my last post. To put the events in a nutshell: Clients have gained substantial confidence in the quality of euro clearing in Frankfurt. This is demonstrated by increasing volumes across all tenors, a market share of more than 14 percent in notional outstanding of EUR denominated OTC interest rate derivatives (IRD), and a growing demand on the buy side.
Let’s have a look at the facts.
We have made strong gains both in the short-term business with forward rate agreements (FRAs) as well as in long-term swaps (IRS). Notional outstanding in Euro FRAs continues to increase and market share lately rose to over 40% percent in April. Euro IRS volume is also growing steadily and market share measured in notional outstanding rose to above 7 percent in April.
>insert graph on IRS notional outstanding in trillion>In addition, we have made significant progress in onboarding new buy-side clients.
In total, more than 220 end clients are now connected to our OTC IRD offering – of these, 90 customers in 2019 alone. And a significant pipeline of insurance companies, pension funds or asset managers are currently in the midst of the onboarding and readiness process. Moreover, in the last six months the number of customers getting active in the OTC interest rate derivatives (IRD) business has increased by 50 percent.
>insert graph on client DV01>And as you can see in the adjacent chart, client demand remains fairly balanced. Cumulated across all tenors the balance fluctuates around the optimal value of 50 percent i.e. full balance in demand for payer and receiver swaps. So again, there is no sign of a solely directional flow at Eurex.
Remember, when I wrote in November about execution costs at Eurex Clearing? We had just observed a steep increase in the basis for euro swaps between LCH and Eurex Clearing. I was firmly convinced that there was no fundamental reason for this development - today you can see in the chart below that this was indeed the case – the basis decreased again. Does this mean it will stay there? Long term I’m convinced it will. Can there be temporary fluctuations? Yes, of course – offering a chance for those benefitting from temporary “mis-pricings”.
>insert graph on Eurex-LCH Basis>But the more important point: How did the offered spreads and sizes develop? Looking at Tradeweb or Bloomberg screens, over 20 firms are actively quoting Eurex swap prices with pretty much the same spread and size as for LCH.
To sum up: Key to growing an alternative liquidity pool is the efficiency of price formation. This is good news for all Category 3 firms which will be subject to the clearing obligation from June 2019:
In view of the ongoing regulatory uncertainties, Eurex Clearing offers a liquid alternative to clear EUR-denominated IRS – same spread, lowest funding cost and EU-based. Find out more about the funding costs in my next blog.Thu, 16 May 2019 14:00:00 GMT2019-05-16T14:00:00ZTraiana provides central clearing connectivity to Eurexhttps://www.eurexchange.com/exchange-de/ueber-uns/news/Traiana-provides-central-clearing-connectivity-to-Eurex-1542420
The connectivity allows Traiana to provide venues, trading parties and clearing members with an end-to-end clearing solution for OTC interest rate swaps. By connecting Traiana’s Clearing Hub with Eurex, market participants can submit trades executed on electronic trading venues for clearing. They also benefit from Traiana’s Credit Risk Hub (LimitHub) which provides pre-trade checks for client orders placed on regulated trading venues and post-trade checks for voice executed trades; both requirements under MiFID II in Europe and Dodd-Frank in the United States.
Traiana’s direct central clearing connectivity with Eurex assists clearing members managing client limits with their post-trade workflows and supports clients who allocate on a post-trade basis using a standby broker with “Bunched Orders”.
The connectivity reflects the increased demand from market participants for access to Eurex Clearing OTC IRD clearing services.
“This connectivity agreement is well-timed for market participants keen to use our services to consolidate their OTC clearing processes and benefit from an increase in clearing activity at Eurex,” said Steve French, Head of Connectivity and Messaging, Traiana.
“Traiana’s clearing services are an essential part of the OTC clearing process and their efficient management of clearing workflows will allow our members and end clients to streamline processing IRS transactions on both a pre and post-trade basis,” said Danny Chart, Head of Business Development, Eurex Clearing.
The press release of Traiana can be found here.Thu, 09 May 2019 08:00:00 GMT2019-05-09T08:00:00Z